Saudi PIF construction contracts plummet amid scaleback

• Value of contracts less than $30bn
• PIF accounts for only 14% issued
• Focus on AI and digital infrastructure

The value of construction contracts issued in Saudi Arabia plummeted last year to less than half of that in 2024 amid cutbacks to the Public Investment Fund’s budget and a reprioritisation of projects, according to industry bodies.

The total value of contracts issued across the kingdom in 2025 was less than $30 billion, almost 60 percent below the $71 billion issued in 2024, according to data released by the Saudi Contractors Authority.

Contracts issued by PIF fell at an even sharper rate. The sovereign wealth fund accounted for more than 38 percent of all construction contracts by value in 2024, around $27 billion.

Last year, it made up just 14 percent of total issued contracts.

The drop in contract issuances follows decisions made at the PIF to pare spending across its portfolio at the start of 2025. It coincides with a fall in the oil price, which dropped from an average of $83 a barrel in 2023 to begin this year at about $60.

The value of contracts issued in 2023 was $113 billion, according to the SCA, almost double that of in 2024 and more than four times the value of those issued last year.

“It was evident something was going on much earlier last year in terms of the drop in contract awards,” said Tim Callen, a former IMF mission chief to Saudi Arabia. “It’s in line with what you would expect, given the declining oil revenues. I don’t think it’s a surprise that the PIF in a sense has led the way on this.”

PIF and government officials have recently indicated an intention to focus less on large infrastructure projects, such as Trojena and The Line, and prioritise projects related to the 2034 World Cup and 2030 Riyadh Expo.

Professional service companies working in Saudi Arabia say that budgets have been tightened, while the focus has shifted away from trophy projects.

“There’s clearly going to be a lot of construction activity going forward, refocused away from the gigaprojects,” said Callen. “Data centres is one area.”

So far in 2026, the largest issuer of contracts has been the Saudi Data & AI Authority, a government agency charged with the country’s digital infrastructure buildout.

The SDAIA’s $2.7 billion contract to build the 480MW Hexagon data centre in Riyadh accounted for almost 90 percent of the total value of contracts issued in the first month of this year.

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